Culture
Economy
Product
Price
Consumer
Needs
Promotion
Law
Place
Competition
Technology
What was the answer?
• A low-cost, high-quality plastic watch
– low cost means high volume
– high volume permits economical automation
– automation reduces labor costs (<10% of total
costs)
– with low labor costs Swiss can produce the
entire product themselves (vertical integration)
– do not have to outsource for parts, they can
maintain strategic independence
Culture
Economy
Product
Price
Consumer
Needs
Promotion
Law
Place
Competition
Technology
Product Positioning
Omega
Cost
Quality
j brands
Importance
i
Weight
n Attributes
Swatch
(a)
Tells Time
10
10
(b)
Inexpensive
6
9
(c)
i=n
SWi =1
i=n
i=1
Attitude (j) =
S
i=1
Wi Xij
Timex
Culture
Economy
Product
Price
Consumer
Needs
Promotion
Law
Place
Competition
Technology
Culture
Economy
Product
Price
Consumer
Needs
Promotion
Law
Place
Competition
Technology
The SMH ("Swatch group") product line
Breguet
Blancpain
Jaquet Droz
Omega
Glashutte
Original
Rado
Leon Hatot
Union
Balmain
cK
Tissot
Hamilton
Certina
Endura
Mido
Flik Flak
Swatch
CY3
Les
Boutiques
Longines
The Swatch group product line
Culture
Economy
Product
Price
Consumer
Needs
Promotion
Law
Place
Competition
Technology
Culture
Economy
Product
Price
Consumer
Needs
Promotion
Law
Place
Competition
Technology
Brand identity and brand image
• What was the brand image Swatch intends to
portray?
• What image do you have of Swatch watches?
• Brand extensions?
Psychographic segmentation of U.S.
consumers
•
•
•
•
•
•
•
•
•
•
6-10 Consider it "cool", because big kids have it (42% awareness!)
11 –15 ("teeny boppers") provides sense of identity
11 –15 ("young rockers") high awareness, but represents t.b. lifestyle
11- 15 ("students") Swatch too wild for them, but they might buy it to
fit in
16 –22 ("rockers") like the price, but dislike the male model geeks
16 –22 ("preppies") prefer a dressier watch
16- 22 ("trendies") hate it; "fast food of time pieces" (73% wear no
watch)
22 –32 ("transitionaries") like its durability, disposability, price
22 –43 ("older casuals") watches are used to tell time (4% awareness!)
33- 43 ("weekend hippies") teen image (high awareness, but 43% have
never seen a Swatch in real life
Culture
Economy
Product
Price
Consumer
Needs
Promotion
Law
Place
Competition
Technology
What was Swatch's innovation
for stimulating demand for watches?
Market Segments
• Swatch was part of a multi-segment strategy
8
42
> $400
> $75
450
Millions
Sold
Per year
Omega
Longines
Swatch
price
j brands
Importance
Weight
i
Ultra
n Attributes
Brite
Gleem Crest
(0.6)
Decay Prevention
2
7
7
(0.3)
Taste
6
4
4
(0.1)
Whitening Power
7
5
2
i=n
SWi =1
i=n
i=1
Attitude (j) =
S
i=1
Wi Xij